Medium-term Management Plan
The Kansai Paint Group began its 17th Medium-term Management Plan (17th MTP) in April 2022. The 17th MTP is positioned as a shift toward a sustainable growth cycle, and simultaneously, it marks the first three years in which we will actively address Materiality through concrete actions. The plan is crucial in our efforts to boost corporate value. It represents a management strategy to transform from Good to Great. The 17th MTP sets forth the key principles of cash generation by increasing profitability, aggressive investment in growing markets, and strengthening the management infrastructure, clearly laying out the Group’s direction.
17th MTP Targets and Strategy
Quantitative Targets and Progress
In FY2022, the first year of the 17th MTP, we exceeded the target for net sales. On the other hand, improvements in profit margins have been delayed since the initial plan even though we are passing on costs to prices while costs for raw materials, energy, logistics, labor, and other items are rising sharply.
Considering the significant changes in both the external and internal environment compared to the time of the announcement of the 17th MTP in November 2021, including the significant progress made in improving the portfolio through the sale of the African business and the dissolution of cross-shareholdings, we announced revised targets MTP at the strategy briefing on November 14, 2023.
Excluding the Africa business, sales were revised upward by 50 billion yen to 550 billion yen, and the profit target was changed from EBITDA margin to profit amount, and the profit amount was set at 85 billion yen, unchanged from the original target.
FY2023 Plan
In FY2023, the second year of the 17th MTP, we are planning record-high figures for net sales, operating income, ordinary income, and net income attributable to owners of the parent.
• Significant sales growth expected in the automotive and industrial segment in Japan and the industrial segment in Europe
• Offsetting the increase in various costs, including energy, by price pass through, volume increase, and decline in raw material prices
• Sale of strategic shares and idle land in India
| FY2022 Actual | FY2023 Plan | YoY change | % change | |
|---|---|---|---|---|
| Net sales | 509.1 | 550.0 | 40.9 | 8.0% |
| Operating income | 32.1 | 42.0 | 9.9 | 30.9% |
| Operating income to net sales ratio | 6.3% | 7.6% | 1.3 pts | — |
| Segment income | 37.8 | 45.5 | 7.7 | 20.2% |
| Ordinary income | 40.2 | 45.0 | 4.8 | 11.9% |
| EBITDA | 57.8 | 67.0 | 9.2 | 16.0% |
| EBITDA margin | 11.3% | 12.2% | 0.8 pts | — |
| Net income attributable to owners of the parent | 25.2 | 55.0 | 0.8 pts | 118.3% |
17th MTP Measures and Progress in FY2022
- 1.Business strategy
- Main plans and investment scale
- Three Bolt-on M&As
Decision to sell African business
HR system: Job-type employment system for managers
- 2.IT reforms
- Main plans and investment scale
- Second Phase of the Performance Improvement Committee:
► Initiated activities
► Global Digital Platform (GDP): Started operation
► IT Medium-term Management Plan
・Business continuity, Total optimization, Flexibility, Scalability, Visualization, and Pursuit of the latest technologies
► Organization / Processes
・Develop IT talent based on new IT organization plan
・Optimizing workplace: Relocated to Umeda Gate Tower
- 3.Renewal of supply chain
- Main plans and investment scale
- Formulation of basic plan on renewals in Japan
・Consolidate locations
・Achieve both business continuity plan (BCP) and productivity improvement
・Decarbonize production and logistics (Scope 1 and 2)
・EBITDA margin raised by 5% after the renewal
Japan, a leading country in the issue, will implement first, and measures will expand globally after 2030.
- 4.Projects
- Main plans and investment scale
- Optimization of procurement, design, and production project
・52 members: Introduction of Product Lifecycle Management (PLM)
Performance Improvement Committee (Second term)
・60 members: Promote DX in Japan
GDP project
・40 members: Global team
Culture Cultivation Project: Joined Human Resources Development Department
- 5.Human resources strategy
With the goal of producing a large number of global human resources with a management perspective, we will broadly seek out talent internally, externally, and both domestically and internationally.
We will establish the Human Resources Development Department to improve engagement and reestablish the training system.
We will also create numerous opportunities for projects and the executive management of affiliated companies, and strategically nurture human resources who embrace challenges.
- 6.Governance
We believe that governance refers to all systems that enable the Group to keep moving in the right direction and execute its strategies. We will continue to strengthen our systems to thoroughly enforce the understanding that “what is right is right, and what must not be done must not be done,” or in other words, “profit and fairness.”
Regular meetings of the Information Security Committee
Significant reduction of cross-shareholdings
Skills lectures by outside directors and off-site discussions
Review of skills matrix
Human Rights Policy
